Key questions from the first quarter earnings call conducted by Urban Outfitters, Inc. on May 15, 2008.

Kimberly Greenberger (Citigroup Global Markets): How much margin are you getting from all of the different components?

John Kyees: We do not want to give that kind of detail. I will tell you that the bulk of the impact was markdowns, but we got leverage from a 10% comp on our store occupancy and his comment was we had improved initial markups. From the SG&A increase the majority of that, there is over $4 million in the quarter that will not be repeated in future quarters.

Brian Tunik (JP Morgan): Could you give color by category on men’s apparel versus women’s in the Urban division?

Ted Marlow: We do not share much color in regard to category performance. The callouts that Glen made in the letter are spot-on in the performance. We did have nice comp performance in each division, accessories was strong for us. The one thing I would share with you, whereas in the past we have had some difficulty getting all of our accessory categories to perform for us. Out of essentially 12 categories that we merchandise there, all performed nicely positive. More importantly the women’s apparel side saw a continued improvement as we came through the quarter and the other categories of the business as well gave more than their fair share.

Jeff Black (Lehman Brothers): When you add Terrain and Leifsdottir, what are you thinking is achievable in terms of operating margin over the next couple of years for both of those initiatives?

John Kyees: Terrain will have solid operating margins. It is going to be awhile before it gets critical mass to be able to cover the corporate expense and that is why we have been saying for some time that we think it is about a $2 million P&L hit annually for the first two or three years; $500,000 a quarter with the exception of this first quarter where we had start-up costs that were unique. That is appropriate. I think Leifsdottir will be the same situation. It is going to take some critical mass. It has been well received so we feel positive that it will have reasonable operating margins for a wholesale business but they still will have some expenses that will have to be dealt with on a critical mass basis.

Jeff Black (Lehman Brothers): Do you think sort of a mid-teens margin is achievable on both or is it north of that?

John Kyees: It is a toss-up right now. As we expect company to do 20%, we expect this to approach that at some points in the future, both concepts.

Roxanne Meyer (Oppenheimer & Co.): The intimates business over time has been taking up more space in the Anthropologie stores. The one I go to is on 16th Street and it has expanded on that bottom level. How it is doing, where can it go, how big it can be and how you would describe the customer who purchases it in terms of the size of your demographics?

Glen Senik: The intimate’s customer at Anthropologie is the same customer who shops the rest of the store. The intimates business has been excellent for the brand for some time. All of the divisions in all of our businesses were comp-positive and I would include intimates with that. The intimates business at Free People is doing well and we have had a tremendous reaction with 300-door distribution in its first full year of business. There is wonderful opportunity for the intimates business in all of our brands and we think we can position it uniquely in each brand.

Adrienne Tennant (Friedman, Billings, Ramsey): Can you give any comment on May trends, month-to-date?

Glen Senik: Our business continues to run ahead of our modest single-digit comp plan, which is what we would be prepared to say right now. We are making good progress, in fact I just got back from a wonderful trip in the Far East last week. We are right on schedule with our CTM initiative. We are cutting weeks out of the calendar. We are reducing factories. We are pleased with the costs we are getting with the improvements in product that we are getting.

Christine Chen (Needham & Company): Anthropologie faces difficult comparisons for the rest to the year. Were there missed opportunities last year?

Glen Senik: The average comp for Anthropologie over the last five years has been 10%. I have not looked at the number for the last 10 years but it is not too far from that. We are our most self-critical audience and we always think there is opportunity and we do not plan for 10% comps but if history can repeat itself, it is something that we could see.

Christine Chen (Needham & Company): Were there any categories in particular?

Glen Senik: That hindsight is always 20/20 so there are things that we could have done better in every part of the business from the assortment to the inventory flow to the way we run our stores, visual merchandising, marketing, etc. and we deliver the quarter we delivered because in all of our brands we have just an incredible amount of consciousness, a brutal sense of looking at the facts and the details and we pick apart every lever in our business and we do not always get it right, but we get it right more often than not. We have stable teams; every season is an iterative process so it builds on the season before. That is why we have been able to deliver the comp performance over time that we have and we plan low single-digits but we can beat that.

Samantha Panella (Raymond James & Associates): What are the store openings scheduled by quarter for the remainder of the year?

John Kyees: We expect much more balanced openings this year than we have ever had historically. With our 11 stores in the first quarter, actually 12 with Terrain, and then 12 next quarter, 15 in the third quarter and 12 in the fourth one. So and that may add to more than the 45 number. We are constantly shifting openings and deciding based on occupancy situations and how quickly we can get possession. Those should be good ballparks.

Robin Murchison (SunTrust Robinson Humphrey): In terms of overseas and sourcing, especially as regards to the opening of the Hong Kong office, what are your thoughts around that at this point?